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Russia’s Largest Online Retailer Will Accept Bitcoin Despite Central Bank Slapdown

Last Updated March 4, 2021 4:56 PM
Samburaj Das
Last Updated March 4, 2021 4:56 PM

Russian e-commerce giant Ulmart is planning to start accepting bitcoin as a method of payment from 1 September 2017. The online retailer was considering accepting bitcoin earlier in February 2017, only to see intervention by Russia’s central bank.

Launched in 2008, Ulmart – essentially the Russian counterpart of Amazon – is based in St. Petersburg and serves over 240 cities and towns in the Russian Federation.

In a press release published on Wednesday, Ulmart adds that it has been monitoring the regulatory environment of cryptocurrencies in Russia for several years.

“Ulmart started closely monitoring the market and regulatory environment for the use of cryptocurrency in Russia as early as March 2014,” revealed Dmitry Kostygin, chairman of Ulmart. “As blockchain technology is coming into our operations to fight counterfeit items, we see that the mystery that existed around bitcoin three years ago has significantly receded.”

An Ulmart warehouse in Russia.

Notably, the company adds that it ‘has not yet decided which products will be available for purchase by bitcoin,’ hinting at the lack of a sweeping bitcoin payment gateway implementation for all products sold on its website. Higher-priced products will be targeted first for bitcoin payments – ‘items such as user cards and apartments, which may soon be sold via the marketplace’.

The e-retailer says it now sells close to 150,000 items as a first-party seller on its website. Plans toward the launch of a marketplace this year could see up to 1 million items sold on its website from third-party sellers.

Bitcoin Blocked

If it were up to Ulmart, the retailer could have already enabled bitcoin payments. Speaking to Bloomberg in February, Kostygin revealed:

We saw that there was demand [for bitcoin payments] from some of our customers and so we were considering that seriously. But then, as the central bank intervened, we wouldn’t lose our time [with the feature].

The executive was then asked if the central bank gave any explanation as to why it put the brakes on Ulmart accepting bitcoin earlier this year.

He stated:

Well, they declared that to be a surrogate currency and that any operation [transactions] with bitcoin would be suspicious.

Since then, Russian authorities’ have taken a remarkable U-turn from seeking to outlawing cryptocurrencies to possibly acknowledging and regulating bitcoin.

Until this year, Russian authorities took a notoriously hardline stance toward bitcoin and other digital currencies. Last year, the Russian Ministry of Finance went so far as to push for legislation that outlawed cryptocurrencies, calling for criminal charges with prison terms for adopters. This year, however, the Russian deputy finance minister has hinted at acknowledging bitcoin and other digital currencies in a legal capacity in 2018.

“We welcome the willingness that the Russian government has demonstrated with regards to the review of bitcoin technology and look forward to cooperating with it in this area,” started Ulmart chief international officer Brian Kean. “Ulmart believes such initiatives as bitcoin can be part of the efforts to develop ‘smart’ economy and cities will aim to play a major role in this process.”

Images of Ulmart from Shutterstock.